Global benchmark, Brent crude, on Wednesday traded around $47 per barrel, its highest level this year, buoyed up by news of falling output and a weakening United States dollar.
Brent, against which Nigeria’s oil is priced, later fell to $46.47 per barrel, after earlier hitting a year-to-date high of $47.05.
The international benchmark has risen by nearly 20 per cent in April, its largest one month gain for the past 12 months.
President Muhammadu Buhari had proposed $38 per barrel as benchmark oil price for this year’s budget, which was recently approved by the National Assembly.
There were fears two weeks ago that a sustained price rally, after almost two years of decline, would be damaged by the failure of the major oil producers to agree to limit oil production at Doha, Qatar, on April 17.
On Monday, the World Bank said amid improving market sentiment and a weakening dollar, it had raised its 2016 forecast for crude oil prices to $41 per barrel from $37 per barrel in its latest Commodity Markets Outlook, as an oversupply in markets was expected to recede.
It noted that the crude oil market rebounded from a low of $25 per barrel in mid-January to $40 per barrel in April following production disruptions in Iraq and Nigeria, and a decline in non-Organisation of Petroleum Exporting Countries’ production, mainly US shale.
Excepts from ThePunch
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